The Real Problem with the Postal Service

“The deep hole of debt that is currently facing the U.S. Postal Service is entirely due to the burdensome prepayments for future retiree health care benefits imposed by Congress in the Postal Accountability and Enhancement Act of 2006,” Nader wrote last week in a letter to Senator Joseph Lieberman (D-Connecticut) and Congressman Darrell Issa (R-California.)

“By June 2011, the USPS saw a total net deficit of $19.5 billion … [this] deficit almost exactly matches the $20.95 billion the USPS made in prepayments to the fund for future retiree health care benefits by June 2011. If the prepayments required under PAEA were never enacted into law, the USPS would not have a net deficiency of nearly $20 billion, but instead be in the black by at least $1.5 billion.”

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I heard this on NPR a while back and was shaking my head the rest of the way to work. I almost emailed you about it but got busy later that day. All the hot air spent trashing the inefficiency of the p.o. and it turns out it actually is solvent – financially thriving even! The postmaster general also noted that congress chides them for not running more like a for-profit business but, as the postmaster general said, what for-profit business is told how many branches they must have and where they must be located, and what for-profit business is told it must provide Saturday services at Monday through Friday costs? The Right simply hates any successful narrative of a publicly provided service, and thus insists on spinning the post office as a massive fail, despite the facts.

Not to mention how top-heavy it is; the USPS has one of the smallest boss to worker ratios around. And they never travel alone; they always come down from Cleveland in threes, standing around watching us. It is totally over centralized, and like all centralization this is accompanied by massive inefficiency. There are people who have never carried mail in their lives, sitting at a desk fifty miles away, making decisions about how I should do my route. And about how my boss should run his office. Confirms all my Catholic intuitions about subsidiarity…

But maybe it’s good to prepay future retiree benefits. After all, corporations have often avoided paying into their pension funds, then they file for bankuptcy, and, behold, there’s no money in the workers’ pension funds, though somehow the pensions for CEOs and their cronies are always ok.

Agreed that executives ought not loot pension funds, and agreed that prepaying benefits is a good idea. But the Postal Service is prepaying 75 years in advance! We are paying for benefits for people who are not born yet. That may be a great idea if you have a surplus, but as the policy is bankrupting you it is stupid.